Confession: I don’t get Snapchat. I am not surprised because most people my age don’t. I will not mention my age, although there are times I feel as old as Methuselah and (this should give you an even better idea of my vintage) work in a newsroom where most people are young enough to have never heard of the man.
On Wednesday, Snap Inc., the parent company of Snapchat, sold shares in a $3.4 billion initial public offering (IPO). That sale valued Snap at $20 billion, not bad for a company that had revenue of $404 million and made a loss of $515 million last year. Around the same time, The Economist featured an explainer of Snapchat, clear proof, if any was needed, that the app has now become mainstream.
Snap is a new age media company and Snapchat is its popular messaging app; 158 million active daily users (as of December) post around 2.5 billion snaps (as they are called) on Snapchat daily. That works out to just under 16 snaps per person on average, which is a healthy number. And the company was founded in 2011 by three men, two of whom are now billionaires. The third (the young man who came up with the idea of Snapchat when he was thinking about more effective and foolproof ways of sexting) was paid $157.5 million to vanish.
Which is apt – if you get Snapchat, that is; if like me, you don’t, never mind.
In many ways Snap is a company that best captures the zeitgeist of the 2010s. It is all about the here and now. Anything posted on it – the snaps, that is, everything from text to photographs with quirky filters, to videos – vanishes after 24 hours. That transient nature of the app appeals to a generation best described as ephemerals, 18-24-year-olds who are the main users. Almost half of all Snapchat users fall in this age bracket. In the US, this proportion is higher, close to 60%. In contrast, in the US, only 9% of Facebook users are between the ages of 18 and 24.
This is a generation that has moved on, from the dxxk pictures that were hugely popular on the app at one time to more slice-of-life stuff that usually aims to be funny or provocative, or both. Hardcore Snapchatters remind me of reality television stars who go through life assuming that they are always on camera.
I’ve borrowed the name ephemerals from botany for two reasons. One, Snapchat itself is ephemeral in nature. Two, most people use the term millennials to describe the generation, but this is not entirely accurate. The term millennial usually refers to someone who reached young adulthood in 2000 (or 2001/2002). That would make that person far too old to be a core Snapchatter.
Most older people do not understand why they should worry about something as ephemeral as Snapchat. But the fact that it is very popular with young people hasn’t gone unnoticed by media companies and advertisers. Advertisers on Snapchat have convinced themselves that ads do not need to be enduring – like everything else, they vanish after being viewed once or after 24 hours – to create advertising messages that are enduring.
In some ways, Snap’s evolution, from a messaging platform to media and advertising platform, is reminiscent of Facebook’s, and that company dominates the mobile advertising business today. Facebook has 1.2 billion active daily users. On Thursday, the day of its debut, Snap’s stock rose 44%, a reflection of investor expectations (and the company’s value rose to $28 billion). That debut pop also seems to have put to rest, for the moment at least, concerns of slowing user growth.
For both advertisers and content creators (including journalists), the popularity of Snapchat and the success of the Snap IPO are further proof of the appeal of bite-sized and very ephemeral content. Companies that want to build audiences of young people have no option but to be there. For instance, late last year, The Economist launched a weekend edition on Snapchat.
(R Sukumar is editor, Mint)